Abstract
This chapter discusses the possibility of developing an energy market in Turkey. Turkey currently serves as an energy transit corridor, with the Baku-Tbilisi-Ceyhan (BTC) and Kirkuk-Ceyhan pipelines and with its seaborne oil trade, where large volumes are carried by tankers through its straits. Turkey also has the potential to become an energy market with new projects connecting producers in Central Asia, the Middle East, and the Caucasus, and major consumers of oil and natural gas in Europe and other regions of the world. Two recent megaprojects, The Trans Anatolian Natural Gas Pipeline Project (TANAP) and Turkish Stream will move Turkey closer to fulfilling this dream. Turkey, however, needs to meet some requirements to be considered a mature energy market. These are related, among others, to factors such as its infrastructure, storage capacity, market reforms, and easy market access for private firms to actively participate in the energy market.
TopBackground
Rapid economic development has increased the energy demand in Turkey in recent years. The demand for energy, however, increased at a higher rate than GDP growth, averaging 5.7% per year for the 2002 to 2015 period. Turkey spent $37.6 billion in 2015 on energy imports, which was about 60% of the balance of payments deficit for the same year (Karar, 2016).
Turkey has a limited amount of proven oil reserves and very little natural gas. Turkey would like to keep external dependence at acceptable levels because of energy security reasons. Turkey aims to reduce energy dependency by meeting 35% of its energy needs with its domestic resources of coal and hydraulic energy and by making more investments in renewable energy and by increasing energy efficiency.